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Nov 19, 2015

22 Car Fleet Managers discuss TCO when choosing alternative powertrains at IFMI in Rome

This year’s International Fleet Managers Institute special session took place in Rome on November 18. Across nine insightful presentations, worldwide experts, fleet, purchasing and procurement professionals addressed the evolution of alternative powertrains for fleet vehicles. Four main factors play an important part when choosing alternative powertrains: driver behaviour, government subsidies, charging infrastructures and fuel costs.

According to Tony Elliott, Global Fleet expert, a comparison between the theoretical costs and the actual costs of rented vehicles is necessary. Many countries wishing to develop in the international fleet scene make this comparison to optimise the costs. The final cost of a leased car is always different than the initial total cost prediiction and is in large extent internal in reality: car policy, type of driver, tires use, insurance, etc.

Dr. Pietro Capaldi, Researcher at the Intituto Motori from Napoli, explained that diesel engines will face many problems in the future, and gas fueled or full electric vehicles offer high performances with low CO2 emissions. His presentation raised an interesting discussion around the future potential of diesel cars, which despite the Dieselgate, offer the best TCO actually.

Denis Férault, Arval, disagreed with Dr. Capaldi regarding the evolution of hydrogen vehicles the following years. Mr. Férault considers once the security problem of this type of engine is solved they will be included more into car fleets.

Dual fuel CNG/Gasoline vehicles have lower performances because engines are not adapted yet and high boosted turbocharged engines are needed for optimisation. For Dr. Capaldi Gas fueled high-boosted CNG vehicles are the best fitted to obtain high-efficient cars and limit TCO. Also, full electric cars allow a cost-reduction depending on tank capacity and battery performances.

For Erwin Boumans, BDO Belgium, the main trend in car taxation is to give incentives to green cars and raise taxes for diesel vehicles. The main differences concern additional taxes on luxurious cars in many Mediterranean countries (Greece, Morocco) and taxes on CO2 emissions. In the immediate future many authorities, especially the European Union, will graduate taxes on those CO2 emissions. EVs purchasing price is higher, but due to governments’ subsidies their TCO is only 10 %.

Fuel costs, allocation and charging station are the three main elements that need to be considered regarding alternative powertrains for Nathalie de Vries, Senior Consultant LeasePlan International. Also, driver behaviour can appear counter-productive if the wrong type of driver gets a hybrid car.

EVs can present many advantages like positive TCO, fewer taxes, low CO2 emissions, reduced maintenance costs and promotes a company’s green image according to Ralf Kostrewa, Head of Fleet Sales International at Volkswagen Group. For Mr. Kostrewa manufacturers developing alternative powertrains should adapt to the specificities of every country market. This EV market exists only for the last five years now explained Nicolas Pelpel, Fleet Manager at Nissan Europe SAS, but it is evolving a lot faster than other alternative like hybrids. The recycling of batteries and charging are the two major cost issues after the end of a green car. For the Renault-Nissan Alliance the business opportunities for second life batteries go up to 75 % and the majority of EVs, 83%, are charged at home or at the office. Jean Zermati, Group Fleet Manager at Orange, remarked that charging at gas stations can be more cost-interesting. Especially because every employee may not be able to charge its vehicle at home. Right now, EVs is the cleanest technology confirmed Elisabeth Delval, responsible for Renault’s Zoe.

Gregory Bech, Category Manager Fleet EMEA at Johnson & Johnson, shared tips to implement EVs such as build a policy to maximize cost effectiveness, choose the drivers most fitted to use them, engage finance and fleet partners for inside analysis, and use your current OEM partners.

The only way to continue city center business in upcoming five years, with the rise of authorities’ restrictions, is EVs and the evolution from the usage logic to the possession logic. We are in a sharing economy and sharing is open space explained Jean Zermati, Orange. Even if the electricity price grows by 25 %, TCO is not affected. The charging infrastructure is what needs further development and it depends on the use of the EV for Mr. Zermati. At the end, it also depends on a company’s ambition to promote alternative powertrains noted Nathalie de Vries.